Ammo Shortage - An Example By The Numbers

Okay, I know some out there really hate the new math especially when it translates into a 50 round box of Winchester White Box 230 grain .45ACP going for 40 of my hard earned dollars, and I know many of us would like to blame the evil government like any good conspiracy theorist would. We can blame the government INDIRECTLY all we want. BUT, let's take a step back an look at some real numbers for a second.

According to the May 2013 issue of American Rifleman (that'd be the NRA's membership magazine for those of you who are not NRA members), somewhere between 1 billion and 1.5 billion rounds of .22 long rifle ammunition is produced by all manufactures ANNUALLY. That's up to 1,500,000,000 .22 pills of all sizes and flavors from my personal favorite CCI Stingers to your cheap, dud infested, big box store, bulk pack stuff made to supply the whim and demand of every man, woman and child over a 365 day span of time. And, last I checked, the goobermint wasn't sending out orders for .22 bullets by the ship load.

So, assuming for the moment that the smallest size box you can buy is a 50 round box of formerly cheap fun in a gun, that's 30,000,000 (30 million for those getting tired of seeing zeros like I am) boxes of .22 caliber satisfaction hitting the streets every year.

But, wait, that amount of ammo doesn't hit the street all at once. There's twelve (12) months in a year. 30 million divided by 12 is 2,500,000 boxes hitting the streets a month on average. If we assume that there are an average of 30 days in each month, we get that narrowed down to 83,333.33 50 round boxes of ammo arriving on store shelves somewhere every day (setting aside the fact that deliveries don't happen every day).

And where is all that ammo going? Well, the USA is a big place. There are literally millions of gun owners spread across 50 states clamouring for a piece of that action every day. I know that reality is different, but let's assume that the 83,333.33 boxes a day gets spread equally among the states. That leaves us with 1666.66 boxes per state per day.

What's the likelihood that you're going to be one of the lucky ones to snap up a box or two on any given day when every other Cletus in town is waiting at the gun stores doors on delivery day with cash in hand? Um, yeah. Not good. Do those per purchase limits make a little more sense now?

What does all this mean? That's an excellent question. I'm glad you asked. I don't know much, but I do understand basic economics.

Ammunition manufacturers and their suppliers are and have been working at or near capacity according to every report I've gotten a hand on including perusing some of their websites. That means that supply is pretty well maxed out; or, at the very least, it's as good as it's going to get for the near future. That leaves us with two options: increase supply or lower demand.

As long as the current resident at 1600 Pennsylvania is in office, lower demand is unlikely for the foreseeable future. Maybe ever. As long as there are gun banning politicians clamouring to relieve us of our Constitional rights, people are going to be stockpiling ammo. Truth be told, I don't blame them. If I had the extra cash in my budget, I'd be stockpiling too. Which makes me part of the problem.

On the other side of the coin, supply is harder to predict. For the near term, we can expect it to be relatively constant. In order for there to be an increase in supply at this point, one or more manufactures would have to invest in additional facilities, equipment and the manpower to staff the production line as well as getting their raw material suppliers to ramp up too. The likelihood of those stars aligning comes down to a cold, hard, cost/benefit/profit/loss calculation. If a company foresees that investing the necessary capital to increase production by adding another plant will yield a net profit over a period of time that makes sense to them, it will happen. If not, don't count on it. 

Don't ask me to figure out what that magic profit/loss number is...I don't have enough information to figure it out. For example, if you assume those 30 million boxes sell for an average of $8.00 a box (don't quibble with me about prices for match ammo...this is an example), that's $240,000,000 ($240 million) in gross retail sales. A guesstimated SWAG of the manufactures net profit out of that would be 10% or $24 million. Split that among however many ammo manufactures there are based on market share, and the picture gets even bleaker for the chances of a new ammo factory sprouting from the earth anytime soon.

Now, go ask your buddy who's bragging about his 1000 round score to sit back and let the rest of us have a shot.

Just Do It

In other places at other times, I have written about my profound distaste for NRA's mouth piece, Wayne LaPierre. I personally think his tenure at the helm of the NRA should have ended over a decade ago, and I think he has done at least as much harm as good for the image of responsible gun owners.Who here has forgotten his "jack booted thugs" comment, and how can we not all facepalm ourselves at the recent "Kindergarden Killers" video game reference?

My biggest gripe with the NRA though is the constant fear mongering pleas for more money. When I had a valid membership years ago, it seemed that a week didn't go by without receiving yet another LaPierre penned diatribe about how THEY ARE COMING FOR YOUR GUNS!!!!! 11!!! ZOMG, SEND US ALL YOUR MONEY SO WE CAN FIGHT FOR YOUR RIGHTS.

Based on the number of envelopes I've received since I let my membership lapse out of disgust many years ago, nothing has really changed.

I told you that to tell you this.

Despite my misgivings about the continued wisdom of letting Wayne anywhere near a microphone or TV camera to speak on my behalf as a responsible gun owner, I have held my nose and renewed (okay, so a delay of over 10 years is probably more like a second time new membership) my NRA membership.

If Senator Hypocrite really wants to go for the brass ring of gun control, I'm not going to stand by idly and see my rights taken away without doing something. The NRA may have its flaws, but it's the loudest dog in the kennel and will fight when necessary.

So, if you are like me and you've been sitting around lamenting Wayne "Tin Foil Beanie" LaPierre's so called leadership, it's time to let it go and close ranks with your fellow gun owners. If you've never been a member, now's the time to become a member. What ever your reasons for sitting back, just go do it. It's $25 well spent for a one year membership.

And, hey, maybe if enough of us complain loud enough, the NRA board will finally get the back bone they need to bring a fresh perspective into the mouth piece role.

Let's Talk Money

With all of the talk of proposed gun bans and compulsory buy-backs, I've yet to hear anyone address the economic impact.  Not that it hasn't been addressed, just that *I* haven't run across it yet, so while talking to Jay today we tried to figure it out in our noggins.

That was super hard to do in our heads, so once we got home, I started digging.  I, of course, did it the hard way.  And then, I ran across the NSSF Industry Economic Impact Report.  I don't know why I didn't think of just looking there in the first place, as I'm a member.  Colossal brain fart on my part.

First, though, let's look at the proposed "Compulsory Buy-Back".  There are an estimated 310,000,000 guns in America.  On the low end of the proposed "payment", they're talking $200/gun.  On the high end, $500/gun.

• 310,000,000 x $200 = $62,000,000,000
• 310,000,000 x $500 = $155,000,000,000

I don't know about you, but that's a whole lot of damn money.  Money that we, as a country, don't necessarily have.  But don't worry, the government will just print more. Never mind that it will further devalue our already weak dollar.

Now, let's look at the worst-case scenario - that eventually the "Assault Weapons Ban" gets passed and gradually increases to encompass all guns, so that we are a gun-free nation.  What does that do to our economy?  Obama's got to consider that, because he's already in the hot seat for our unemployment rate.

From the NSSF Report:

Companies in the United States that manufacture, distribute and sell firearms, ammunition and hunting equipment employ as many as 98,752 people in the country and generate an additional 110,998 jobs in supplier and ancillary industries. These include jobs in companies supplying goods and services to manufacturers, distributors and retailers, as well as those that depend on sales to workers in the firearms and ammunition industry. [1]
These are good jobs, paying an average of $46,858 in wages and benefits. And today, every job is important. In fact, in the United States the unemployment rate has reached 8.2 percent. This means that there are already 13,430,000 people trying to find jobs in the state and collecting unemployment benefits. [2]

That's over 200,000 people employed in the firearms-related industry.   200,000+ people who are not collecting unemployment, who are contributing their hard-earned money to help support our country.

The Economic Impact numbers boggle my mind (again from the NSSF Report):



And the taxes paid:



Looking at these numbers actually calms me down.  Why?  Because it doesn't make business sense to cripple our firearms industry.  No matter the emotions involved, I would expect that the political advisors would take into consideration the economic impact this would have for the country.  Go ahead, call me overly optimistic, but at this point, I think we need all of the optimism we can get.

Just over two weeks until SHOT Show and I can't wait to hear what Mez has to report from the State of the Industry Dinner.